Russia: Talks Pave Way For Membership In World Trade Organization

Moscow, 27 February 1997 (RFE/RL) - U.S. and Russian officials yesterday wrapped up in Moscow two days of trade talks aimed at preparing Russia to enter the World Trade Organization (WTO).

The talks brought together a delegation of 20 U.S. representatives with officials from Russia's ministries of agriculture, finance, and justice to hammer out a protocol on market access to foreign companies.

A senior U.S. trade official, who asked not to be named, said the overall negotiations on Russia's entry to WTO were "actively proceeding." But she declined to predict a date for accession, saying the pace of progress in the negotiations depends largely on how quickly Russia takes the necessary steps to comply with the trade club's rules.

She also said the Russians must fully understand what the WTO is all about.

"The negotiations will only be successful if people here understand the benefits of joining the WTO. Membership will provide a certainty and predictability for Russia to compete in foreign markets. It will also make Russia a more attractive place for foreign investment and business."

The U.S. trade official said efforts were underway to work with Duma deputies to inform them about the advantages of WTO membership. She pointed out that a Duma delegation is visiting Washington, D.C. tomorrow for talks with U.S. trade representatives.

Negotiations on Russia's entry to the WTO began in 1993 when the organization was known as the General Agreement on Tariffs and Trade, or GATT. The Geneva-based WTO succeeded GATT in 1995 as the global defender of a multilateral trading system which is aimed at providing a "level playing field" for small and big nations. Once declared a capitalist club by Soviet authorities, the trade group now represents a crucial path for Russia's integration into the world economy.

Last December, Russian Deputy Prime Minister Oleg Davydov, said he expected his country to be admitted into the WTO by the end of 1997. Davydov, who is Moscow's chief negotiator on WTO entry, said Russia needs to be part of the global trading system in order to consolidate the economic reform process. Davydov is widely considered a protectionist, but he has forcefully argued for Russian membership in the free trade club as a way of boosting Moscow's bargaining power in trade talks.

But the road to membership is likely to be long. A package of agreements detailing trade concessions and levels of government support for agriculture and exports must be worked out. Moreover, Russian laws must be brought in line with WTO rules. Western officials have said Russia should tighten up protection of intellectual property rights, liberalize its steel and textile industries and open up its markets to a range of goods and services. Finally the State Duma must ratify the agreement.

But the Duma has recently taken steps which cast doubt on its approval to WTO entry. Last week, the Duma passed a bill restricting foreign investment in those areas of the economy deemed vital to national security, including telecoms and some energy sectors. True, the bill is still to be debated in the Duma and, if approved, be signed by President Boris Yeltsin. But the damage was done.

The eventual WTO agreement face also opposition within the Russian government. Moscow has said it wants to limit imports of vodka and other spirits this year as a way of protecting domestic producers. But United States and European Union (EU) officials have said the possible restrictions would fly in the face of WTO trade agreements.

The U.S. Trade official admitted that there are challenges to concluding an agreement on Russia's entry to the WTO, but she sounded an upbeat tone.

"There are no insurmountable problems. But we have a lot of hard work ahead," she said.